One of the most critical steps for eCommerce owners is to provide many payment options. It is vital to give customers convenience. They should be able to complete purchases with whatever option they desire. These include bank transfers, cash, mobile payments, third-party gateways, debit and credit cards.
In the US, card payments dominate online transactions. They account for 47% of eCommerce, which translates to over $348.78 billion. You can’t afford to miss out on such business potential.
We will share tips on choosing credit cards for your eCommerce system.
Why You Need the Right Credit Cards
Applying for business credit cards has tons of benefits. The first is that it helps you separate business from personal finances. No one can come after your personal money to settle business liabilities.
The second benefit is you start to establish a credit history for your business. A good credit score is critical. You will appreciate the importance if you ever need to apply for financing. That is why it pays to keep a close watch on the credit report. Any errors or inaccuracies could impact the credit score.
But, with the demands of running your business, it can be hard to keep track of the reports. There are many cheap credit repair companies that can help with monitoring. The repair professionals have the expertise to detect mistakes and fix them. They can also help with dispute resolution.
It is vital to choose the right credit card for your eCommerce platform. Proper research is critical to determine the best one for your business. Each issuer has pros and cons that you need to be aware of.
Do note, you will need a payment gateway to accept credit card payments. Start by applying for a merchant account from your bank. The gateways will connect the shoppers’ account to your merchant account.
Now, let’s look at factors to consider when choosing credit cards for your eCommerce.
1. Cost Implications
Credit card companies charge fees for their services. The cost implication will depend on their business model. Industry giants like MasterCard and Visa work with banks to offer the cards. That means they do not issue them directly to users. Their money comes from the transactions on their sponsored cards. Such issuers are an excellent option because of lower fees.
Vendors could pay as little as 2% of the transaction price. Others will take a percentage plus a flat fee. Beyond that, there are service fees for statements, maintenance, and compliance. You may also be liable for costs arising from a chargeback or other account activities.
Pay keen attention to pricing models to determine which one works well for the business. It goes back to reading the fine print with a very keen eye. Also, don’t be afraid to ask questions if you need further clarification.
Remember, any benefits to you will translate to your customers. The right choices can be the edge you need to outdo competitors.
2. Evaluate Your Equipment and Other Needs
Remember, you want to provide convenience to customers. That means meeting them at their point of need, in this case, credit card use. They should be able to transact online, on mobile, or at offline points. The right equipment will ensure a seamless transaction at all times. These include:
- EMV chip technology to accept Europay, MasterCard, and Visa Microchip payments. EMVs are excellent for fraud protection. They also allow for faster checkouts by eliminating signature authentication.
- Provisions for upfront payments instead of the more costly installment plans
- Seamless integration across different platforms, including eCommerce, retail, and mobile.
- Mobile readers, even though you are operating an eCommerce platform. You never know when you may need to use the portable device. Networking or outdoor events could provide an opportunity to make on-site sales.
- Payment gateways, which we have discussed above.
- Automatic monitoring of customer credit cards. A business can lose money if a customer cancels or fails to renew the credit card. This is especially true for those in the service industry.
- PCI compliance of card processors is non-negotiable. You will be collecting sensitive client information. Ensuring safety for such data is crucial to avoiding data breaches.
3. Applicable Benefits
Find out what benefits are applicable for both you as a vendor and the customers. Reward points or cash backs are a big bonus to the business. Some card issuers will give 2% cash back on purchases within a specific limit. The value goes higher, the larger the purchase.
One of the most popular options is American Express, which offers premium rewards. AMEX offers cards directly. That means you may pay a little bit more in transaction fees. They also have the option of flat fees vendors pay every month. Determine which pricing model better suits your business before deciding.
Other issuers work on multiplier reward systems. Such can apply to shipping purchases, travel, internet services, and much more.
Take time to read the fine print to know what benefits apply to your business.
4. Card Networks
Another crucial factor is acceptability. An eCommerce store must provide convenience to customers from any part of the world. The credit card you opt for should allow for this. Visa and MasterCard lead in the number of merchants on board from over 200 countries.
As said, the two do not issue cards directly. Rather they offer their services through partnerships or networks with financial institutions. American Express and Discover are other options. But, they do not have a large global footprint.
5. Spending Limits
The payment processor you choose is critical. Some have limitations on the type of business or service you can provide.
Others may freeze your accounts if there are sudden changes in business patterns. These could include sudden spikes in monthly volumes. The impact on your business when you need cash flow could have a significant effect.
Availing credit card payment options for your eCommerce business has tons of benefits. It pays to give your customers many payment options. Customers can abandon your site if you don’t offer such conveniences.
When choosing credit cards, consider the business and customers. Use our article as a reference when deciding on the best options.